Nortel's LTE Brain Drain

Some of Nortel Networks Ltd. 's top executive and engineering talent in Long Term Evolution (LTE) development had already left the Canadian company earlier this year, long before Nokia Siemens Networks made its bid to acquire those assets, Unstrung has learned.

With the acquisition of Nortel's LTE radio access R&D assets, along with its CDMA business, for $650 million, Nokia Siemens says it will gain some 400 engineers dedicated to the next-generation mobile technology. (See Nortel: It's All Up for Sale and Richard Lowe, President of Carrier Networks, Nortel.)

But many of Nortel's LTE specialists jumped ship earlier this year to find jobs elsewhere after the company went into Chapter 11 bankruptcy protection. Many of those have secured positions at rival Alcatel-Lucent (NYSE: ALU), according to Unstrung sources, but just how many is unclear.

The bankruptcy protection was a fatal blow to Nortel's bid to become one of the suppliers in Verizon Communications Inc. (NYSE: VZ)'s ambitious LTE project. Once that was apparent, many employees defected to what looked like the winning team -- Alcatel-Lucent, Verizon's other main CDMA supplier. (See MWC 2009: Verizon Picks LTE Vendors.)

A prominent executive example of the talent defection is former Nortel VP and general manager of LTE, Doug Wolff, who now reports to AlcaLu's LTE president Mary Chan as VP of end-to-end LTE solutions. (See Hail Mary: Chan Takes 4G Helm at AlcaLu and Avago Claims 10G First.)

"We have lately made a number of hires of some very talented technical experts and managers, including some for LTE coming from Nortel," says an Alcatel-Lucent spokesman. "Beyond that we are not going to comment on how many or in what areas."

According to a Nortel spokeswoman, there has been attrition across the company since bankruptcy protection was announced, but the company would not disclose numbers of employees who have left nor which departments have been hit.

— Michelle Donegan, European Editor, Unstrung